Conflict of interest

Started by MarcelE • 6 replies • 991 views

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MarcelE (District of Columbia)
Posts: 2

Posted:

I am relatively new to the association and the board of my building. When I came in one of our employees (front desk clerk) was also an owner. During my time on the board it became clear that this was not working out and the board did fire him.

To me it seems like a conflict of interest because the association is the employer and the employee was part of the association. The insubordination and entitlement of the employee-owner seemed to stem from his position as an owner. And that he continues to have access to the board meetings as a disgruntled ex-employee highlights the problem of hiring him in the first place.

To avoid this in the future it seems that it is best to have a provision in the bylaws to avoid this conflict. Does anyone have an example of this in their regulations?

Thanks

GwenG (Florida)
Posts: 669

Posted:

Two comments: though it might be desirable to add a Conflict of Interest provision in the bylaws for the future of boards who do think it is a good idea to create a conflict of interest, it is not necessary. Your state corporation laws have conflict of interest provisions but these generally don't relate to office clerks. You could probably just closely duplicate the C of I language already present and add "office secretaries employed by the Association" as a C of I.

For a quick fix, have your board construct and adopt a Standard Operating Procedure. Not hiring owners to work for the Association is common business sense. It is just a plain bad idea on so many levels (as you have identified). It is my experience that this practice never works out and after one bad experience, it is a self-correcting issue. An SOP could put this in writing to remind a future board that it's not a good idea, based on past experience.

I was taken aback slightly by your comment ,
Is this person no longer an owner? If no, do the bylaws prohibit attendance at board meetings by non-owners?

KerryL1 (California)
Posts: 14,550

Posted:

If the former clerk still is an Owner, why shouldn't he attend board meetings?? Or, are board meetings closed to Owners in DC?

I agree with Gwen that it's almost always a bad idea to hire Owners and that DC's corp. laws may be relevant. But a Board resolution along the lines Gwen suggests, makes sense.

MarcelE (District of Columbia)
Posts: 2

Posted:

Thanks for your prompt advice!

To answer your question: any resident can is welcomed at the Board meeting whether they are an owner or tenant, and the person in question is still an owner. What I meant is that as a terminated employee (if he was not also an owner) he wouldn't have access to come to a Board meeting unless he came as someone's guest.

GenoS (Florida)
Posts: 4,276

Posted:

An owner should be entitled to attend the board meetings regardless of whether he's an ex-employee or not. If you want to amend your documents to prohibit hiring owners, go for it, but as long as the relationship is disclosed to everyone there's nothing inherently wrong with it. What insubordination and sense of entitlement is going on?

GeorgeR8 (Arizona)
Posts: 182

Posted:

Quote:

Posted By MarcelE on 10/10/2017 2:20 PM
Thanks for your prompt advice!

To answer your question: any resident can is welcomed at the Board meeting whether they are an owner or tenant, and the person in question is still an owner. What I meant is that as a terminated employee (if he was not also an owner) he wouldn't have access to come to a Board meeting unless he came as someone's guest.

I really don't think having tenants at the meeting is a good idea. You have to go through the owner for anything that concerns them.

KerryL1 (California)
Posts: 14,550

Posted:

We only allow Owners at our open board meetings and Members meetings, too, George. If they see maintenance or other needs on the premises, they have the same right as Owners to contact our onsite PM with complaints.

But others on this forum have noted that they allow tenants at their board meetings.

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